There are a number of changes affecting prescription drug Part D plans this year.
And that makes reviewing options during Medicare open enrollment — taking place now through Dec. 7 — even more important, experts say.
“This year includes some significant changes in prescription drug Part D plans, so it’s important that Medicare participants examine their options closely,” said Paula Muschler, operations manager of Allsup Medicare Advisor.
Among the changes to Medicare drug plans are plan costs, plan drug coverage changes, changes to the donut hole, and new plan options and benefit parameters.
In addition to changes in existing plans, more than 200 new Part D plans are being offered this year, Kaiser Family Foundation reported, while nearly 50 plans left the market.
“Anytime a Part D plan closes down, Medicare participants who were in that plan have a valuable opportunity and should take advantage of this change to study their options. They may have some great new plans to choose from for 2014,” Muschler said.
For example, the average number of stand-alone Part D plans increased for 2014, with an average 35 plans now available to beneficiaries, according to Kaiser.
That’s a lot of plans to sort through, Muschler said. “Part D plans also can change from year-to-year, in terms of their drug formularies and other provisions — so it can get complicated pretty quickly.”
Allsup, a nationwide provider of Medicare plan selection services, pointed out the “significant changes” for prescription drug coverage in 2014:
- The Part D base beneficiary premium is $32.42 in 2014, which is close to a 4 percent increase from $31.17 in 2013;
- 212 new Part D plans will enter the market and 46 plans will leave the market;
- More insurers are featuring Part D plans with preferred pharmacy networks, where the plan provides cost discounts for using that specific pharmacy chain;
- New for 2014 is the small-supply drug option. Medicare Part D participants typically received coverage for a one-month supply of medication. Starting in 2014, though, individuals can ask for less than a one-month supply for most types of drugs. “This may seem like a small change, but it’s a valuable option for patients and their doctors who want to conduct a shorter trial on a medication, rather than having to purchase a month’s worth of medication,” Muschler explained.
Donut hole changes
There will be changes to the prescription drug “donut hole,” the gap of coverage when the beneficiary pays a greater portion of their drug expenses. The initial coverage limit will be $2,850 (vs. $2,970 in 2013), and the out-of-pocket threshold is $4,550 (vs. $4,750 in 2013).
- Medicare Part D participants who reach the donut hole will pay less for their generic prescriptions next year. Their share of brand-name drug costs stays the same at 47.5 percent, but they will pay less for generic drugs at 72 percent in 2014 (vs. 79 percent in 2013).
- None of the standalone Part D plans offered in 2014 will offer full coverage during the donut hole.
The impact of these changes will vary depending on the individual — but the donut hole is one example. Overall, it will be $80 smaller in 2014, but because the initial coverage limit ends at $2,850 vs. $2,970, more people could end up in the coverage gap sooner.
Nearly 2.8 million people reached the donut hole in the first nine months of 2013, an increase of nearly 22 percent compared to last year. About 2.3 million people reached the donut hole during the first nine months of 2012, according to the Centers for Medicare & Medicaid Services.
Muschler said there are a number of reasons to switch — or consider switching — Part D plans. Beneficiaries, for example, should consider plan cost changes, drug formularies, and individual health changes.
“Medicare participants still have several weeks to review their Part D plans and make a selection for 2014, and they may find significant cost and health benefits by seeking help from a Medicare specialist,” Muschler added.